5 Oz America The Beautiful Bullion

What the eBay sellers who sold 10, 20 or 30 pieces?? Houston? We have a problem!

 

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Really? Did the mint place any sanctions on them on your planet? Did they treat them differently than any of the other distributors? At all? Do you deny that their new terms hurt the distributors without retail operations and secondary firms like Provident?

I can't talk about it since I don't have the full agreement in front of me. But I guess that hasn't stopped you.

What I can say is under traditional offer-acceptance analysis, the orders placed under the old terms were offers to buy. Since the orders weren't accepted by the Mint, no contract existed for these coins under the old terms. So the Mint had every right to unilaterally refuse the offers and make a valid counter proposal. They have done so -- this particular spot of price fixing probably doesn't trigger anti-trust provisions.

On the flip side, no one who placed orders under the old terms is required to buy them under the new terms.

Joe six-pack being another name for people who will turn around and reap the windfall instead, right? APMEX acted reasonably and legally under the old terms. The Mint just didn't like the result and had the power to change it.

 

"We?"

Unlike Provident, who merely accepted orders, an eBay sale is an enforceable contract. The sellers can either acquire the coins in the secondary market (at any price) and deliver them, or they commit a breach and not deliver. If they commit a breach, in theory the buyers could sue for benefit-of-the-bargain damages, but lawsuits cost time and money. I doubt very much anyone will bother, even in small claims court.

So in reality, the sellers will refund the payments and attempt to cancel the transaction with eBay. Perhaps a few buyers will give the seller negative feedback and/or refuse to agree to the cancellation. So the losses are going to be time, some eBay fees and perhaps some postage.

 

I notice that APMEX has removed the $1200 buy-back offer and listed 17Dec2010 as the date when product will be available...we'll see.

 

Re-read your original assertion, and then think about the meaning of "proven." Alas, it's time for you to pick up that Black's law dictionary again.

And are you a lobbyist for dealers? Provident isn't crying about this; on the contrary, it simply has posted that it will carry the coins. What makes you so certain it is mortally hurt by the new terms? It likely was being jacked under the initial deal by exhorbitant premiums in the wholesale channel by the Authorized Purchasers; the difference in the return to it from retail sales under the old deal vs. the new deal very well could be relatively modest, if not immaterial (unless it, too, was planning to gouge -- in which case, see the following comment re: Gainesville). Otherwise, do you really expect to generate sympathy for the likes of Gainesville, which apparently hiked premiums on the coins at least 3 times on the day of introduction, the last of which was to a price of $2,000+? You can champion for unmitigated greed by dealers during the initial distribution of the coin all you like. Good luck with that. In any case, to the extent that the non-AP dealer's margins are squeezed under the new deal more than under the old deal, they have Apmex to thank for it. After all, if Apmex hadn't reached greedily with both hands to stuff its face and pockets with the profit pie from this introduction, then there wouldn't be a new deal.

As for the distributors without retail operations, by definition, they only would be selling to dealers anyway...such as Provident. Apparently, since Provident is representing that it will be carrying the coins, the wholesale channels will be operating under the new deal and it's going to work out for the APs without retail operations in a manner similar to the manner it would have worked out under the old deal -- sans the overreaching premium mark-ups.

You can't talk about it since you don't have the full agreement...yet you go on to talk about it and conclude that (i) the Mint had every right to take this course of action; and (ii) Apmex acted reasonably and legally under the old terms. You're always good for a few laughs. If you take the position (as you have) that the 'full agreement' controls, then any of your analysis, 'traditional' or otherwise, is baseless in the absence of the express terms of the written contract.

As I have said before, if anyone was going to reap a windfall, I'd rather it be the Mint itself or the purchasing public, and not the oligopoly of 11 with Apmex as the front runner, who stood to abuse the good faith of the Mint when charged a ~$10 per coin premium, then turn around and jack it up by over 1,000% to the purchasing public as part of the introduction and initial distribution of these coins.

 

Another update from the US Mint

In response to the questions on the minds of all the US Mint's customers about the ATB 5 oz. bullion coins, the US Mint today provided the following update on their "Pressroom" page:

" [crickets] "


I'm glad that they are keeping us informed.

 

I give the mint Kudos for stepping in on this and adding clarity to a bullion release. They have defined "reasonable" as 10% and widely distributed as 1 per household on this limited release. Moving forward, the dealers know more, and we the consumers know what to expect.

With that said, they required Business-to-Business companies to become Business-to-Consumer companies. That seems like a government institution (not paying attention to reality), similar to Congress requiring these coins be built to specifications never seen in the world. :-(

 

Dreamer

what did you expect. This won't come to a conclusion until the end of 1st qtr. 2011

 

I really think they should post a notice explaining what is going on. The notice they sent to the dealers said the coins would be released today under the new pricing restrictions. If someone doesn't have a connection like the one we have through CT, customers would not know even that much.

 

Connection, CT ? who? what ? LOL Oh I see, I had not heard the recent Mint Update. Well, even at *50.00 per set, I'll pass.

 

Does anyone have a list of the current authorised distributors with their websites, or phone # ?

 

Here you go - many don't sell direct to the public or don't have websites that I could find, feel free to add to it.

A-Mark Precious Metals (Los Angeles) http://www.amark.com/
Coins 'N Things Inc. (Massachusetts)
MTB (New York)
Scotia Mocatta (New York) http://www.scotiamocatta.com/
American Precious Metals Exchange, Inc. (APMEX) (Oklahoma) www.apmex.com
Dillon Gage Incorporated of Dallas (Texas) http://www.dillongage.com/Default.aspx
Prudential Securities Inc. (New York)
The Gold Center (Illinois)
Commerzbank International (Luxembourg)
Deutsche Bank A.G. (Germany)
Tanaka Kikinzoku Kogyo K.K. (Japan)

 

And that's where this debacle is going to get even more interesting.

I'd hazard a guess that more than half of the APs don't sell direct to the public and have no particular interest in setting systems up to cope with the undoubted deluge of calls / orders that they'd be swamped with. Especially when they stand to make what...let's say their cost is roughly 5 x $30 + $9.75 = $159.75 per coin and a maximum allowed markup of 10%. So they make $15.98 (rounded) per coin then lose around 2% in credit card fees on a $175.73 selling price ($3.51) for a princely profit of $12.47 per coin.

Even if 100% of their customers pay with a check/money order, or the APs pass on the credit card fees like Apmex, I just don't see those that don't already sell to the public going through all of the associated hassles for a maximum profit of $15.98 per coin. Moreso when in the absence of a similar cluster in future, they'd be setting up for retail sales as a one-time thing.

As I read the Mint memo to the APs, that means that on 20th December there's likely to be a whole bunch of unordered coins to be divided up amongst the APs that choose to participate. So I foresee "just in case" waiting lists at the participating APs after they sell out their initial allocations, and so a whole new cluster starts.

The Mint really isn't doing much to help the situation either. Their memo to the APs states in one place that "...Authorized Purchasers have until 3:00pm Friday, December 17, 2010, to place their orders" and then at the end states that "...Orders for the 2010 America the Beautiful Silver Bullion Coins will be confirmed via fax by 3:00pm Friday, December 10, 2010". So they have until 17th December to order, but the orders will be confirmed on 10th December? Mmmmmkay. There's that Mint time machine in full flight again.

Personally I think Moy should go to Congress and ask to put the whole program back a year so that they can produce this bullion product in sufficient quantities to meet the public demand. As it stands right now, the 150% - 200% markups have just been shifted from the APs to Ebay flippers. The majority of collectors are still going to end up paying > $2K per set regardless of who they pay it to.

Lest this should come off as sour grapes btw, I have no interest in these coins regardless of price. It's semi-amusing to watch the drama unfold though.

 

I notice you dodged the questions. Please answer them.

Because it took orders at a price where it was going to turn a profit that it won't be able to fill. No doubt, they already had their order in with one of the other distributors. It's as simple as that. No, I'm not a lobbyist for anyone, and except possibly as part of mutual fund holdings, I have no financial interest in any entity in the coin, bullion, or collectibles industry. And how about you?

With what inventory, oh evasive one? There aren't any wholesale channels for these under this new deal! Each dealer gets one set per mailing address, assuming they win the web-site flash-crowd lottery. After that, they going to have to buy the coins in the open market, one set at a time, from individuals, paying free market prices, having to deal with the extra handling Q1 sales involve.

Look at the results. I ask again, oh evasive one. Did the mint take any action specifically against APMEX? Did or did not the price that APMEX set meet the legal definitiion of reasonable, since it resulted in sales at a brisk pace between willing buyers and sellers? When the Mint sues APMEX or drops them from their distributor network, look me up.

I respect that opinion. It has exactly zero to do with what's abusive or violates an unseen contract.

 

Speedie;
I agree with your thinking. Let the Mint approach Congress and ask for an extension of time for the program. I felt this way when I heard about the 33,000 limit on each bullion coin's production. The only way you can stop price gouging is to have enough product for anyone who would like to purchase. Perhaps they could ask for production time to include the trailing twelve months after the coin's actual release date. Simply show the year it was released in, as it's date, not the year it was made in. Or a dual date like we had during the bicentennial.

 

The Gold Center in Springfield has a retail store, but I don't know if they do mail order.
http://snipurl.com/1mhh28 [maps_google_com]

As of this morning, Coins 'N Things hadn't decided if they were going to participate or not. But they don't have a store front, and their website www.cntofma.com is a stub.

As far as I can tell, Scotia Mocatta doesn't sell in the U.S. at all and they currently don't list any U.S. Bullion on their Canadian website. But they do sell to the public at Canadian bank branches as well.

Dillon Gage operates on a trading account basis with a minimum order amount set at $5000.

A-Mark operates on a trading account basis and has a 5000 oz minimum transaction size for silver bullion, but no minimum order on collectible purchases. But A-Mark is part of the Spectrum Group, and might be able to move the coins through one of their sister companies. (I have no idea what the Mint would think of that idea).

 

As an FYI: The Gold Center in Springfield, IL has already accounted for their entire allotment. None will be available from them unless you've already got your order in place.

 

I think I'm going to write a letter to the mint to investigate The Gold Center in Springfield, IL. My Dad called them on the 6th and they told him they had already sold out the entire allotment and were very rude, I called later on Monday and they told me "we have not decided what to do yet, call back in a few days and we will have a better idea". We both called at different times Friday and were both told "We will not be receiving any 5 oz coins" Now you call and they say they've sold them all. Very shady

 

Your questions are irrelevant, as once again you've missed the point. Let's review...

Your claim: The mint...proved...my point...that APMEX did nothing wrong.

My rebuttal: Your inaccuracy is matched only by your persistence. Only in your (fantasy) world, counselor, has it been proven that APMEX did nothing wrong.

Your response: <irrevelevant questions>

My rejoinder: Re-read your original assertion, and then think about the meaning of "proven." Alas, it's time for you to pick up that Black's law dictionary again.

You see, the fact that the Mint elected the course it has taken means nothing relative to proving that APMEX did nothing wrong. By your (faulty) logic, the fact that APMEX hasn't sued the Mint has proven that the Mint did nothing wrong. Both are non-sequiturs. Get it?

To my knowledge, Provident did not take any pre-orders. Additionally, your reasoning yet again painfully is flawed; see next item below. And no, other than as a personal stacker, I have no such interest.

You're assuming facts not in evidence, counselor. Keep your eye on the ball; the new deal does not prohibit sales by Authorized Purchasers to other dealers through wholesale channels. Rather, it requires that the coins are sold to the public under prescribed pricing parameters and makes the Authorized Purchasers accountable for the same. I anticipate that that some creative attorney will structure an arrangement under which, for example, an Authorized Purchaser without its own retail operation will, through downstream covenants, indemnities, or even a principal/agent setup, channel these to the public through other dealers, if and as desired. As I pointed out, the issue is one of smaller margins for the dealers resulting from the pricing parameters.

And apparently, Provident also didn't get the memo that says it's precluded from procuring these coins from Authorized Purchasers under the new deal:

http://www.blog.providentmetals.com/news/update-on-the-america-the-beautiful-5-silver-coin-set.htm

Only in your confused mind does the legal definition of reasonable for purposes of this coin issuance turn on whether the coins were sold at a brisk pace. For the real parties in interest, it turns on whether APMEX complied with its obligations under the Authorized Purchaser Agreement. You know, the one that you can't talk about since you don't have a copy of it, but which we know provides constraints on pricing such as, among other things, using comps of other bullion coins -- which has nothing to do with a 'what-the-market-will-bear' standard for pricing.

The Mint slaps down APMEX, even singling it out in its new memo, and you ignore it, electing instead to focus on whether APMEX has been sued or dropped as an AP? News Flash: The Mint isn't interested in a lawsuit. It's interested in ensuring that the coins are sold prior to December 31 in accordance with its mission and direction from Congress. It must be nice up in the clouds where you are; for everyone else, the Mint's rebuke of APMEX is quite obvious.

Nor did I claim that it did. Yet another non-issue that you jump at like a hobo on a ham sandwich.

 

No one has actually received or took stock of these , no one .